With the U.S. hurricane season officially kicking off this month, participants in the esoteric sector of catastrophe bonds find themselves awkwardly in step with the mainstream. As speculation abounds over hurricanes making landfall in the U.S. again this year, all eyes are focused on and the probability for destruction.

But for the CAT bond market, a far more important indicator signals the start of the hurricane season - updated figures from agencies that model catastrophe risk. This year's updates, which don't look promising, triggered a negative credit outlook announcement by one rating agency for certain bonds tied to U.S. hurricane risk.

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